First, huge thanks to everyone who participated in the first stage of the HOPR Genesis DAO. In a world where even billion-dollar crypto projects only get a handful of participants in their community governance, seeing such levels of enthusiasm and debate with over 50 proposals and over 600 voters within very days is amazing.
Thanks also to everyone who attended our Team Intro and DAO AMA. If you weren’t able to catch it, you can watch the recording.
The proposal stage is over, so now we move to the second stage of the DAO, where participants can vote on the proposal they want to be enacted. As explained in our blog post, there will be three proposals to choose between. The vote will begin on Friday, Feb 11, 3pm CET and run for 24hrs.
There will be ONE proposal visible in the Core section of the HOPR Genesis DAO snapshot page, with three options corresponding to the three proposals selected in phase one. Every DAO participant can choose their preferred option, and at the end of the voting period the option with the most votes is the one that will be enacted.
Before you rush off and vote, I want to take some time to run through these proposals, explain what they mean, why they’ve been slightly expanded and modified from the original wording, and why those three proposals are the ones selected.
Let’s start with the disqualified proposals. These were mostly proposals calling for airdrops or other direct distributions to DAO members. The blog post explicitly stated that this was not an airdrop. The point of this governance exercise was for community members to pick a way to distribute 85m HOPR tokens to bootstrap the HOPR project and promote the long-term health of the HOPR ecosystem. This is a complex balancing act, which needs to consider many stakeholders, including established community members, new members, investors, and the more than a dozen people (and growing!) who work for the HOPR Association and who need to be paid for their amazing work. Direct airdrops only help a few of these groups, and are unlikely to result in long-term success.
We also eliminated some other proposals on the grounds of not being actionable (or on the grounds of being our example proposal, but thanks for all the votes!)
That leaves us with the following three proposals that were the first to reach the threshold of 3% of voter support and which will be presented in the second round. I’ll link them below, then discuss the details a bit more.
These proposals all have roughly the same structure, although the specifics are very different.
Phase 1: First, some portion of the 85m tokens will be allocated to a pre-sale on xDAI chain, where only DAO participants can buy tokens. Participation in this presale will be capped, with everyone being able to buy an equal amount of tokens. HOPR tokens bought in the pre-sale will be locked for at least 72h and the end of the next phase (or much longer in the case of Proposal 3). Unsold tokens will roll over to the next phase.
Phase 2: Of the rest, the majority will be placed in a Balancer Liquidity Bootstrapping Pool (LBP) where the optimal price will be discovered via a decreasing price auction. The liquidity for the LBP will be provided from the pre-sale, with the xDAI raised being converted into DAI. Upon conclusion of the LBP after 72h, the liquidity in HOPR + DAI will be placed into a Uniswap pool and a liquidity mining program that runs over 3 months.
So this is the mechanism which the community has decided on, and we think it’s a great idea, with a couple of caveats.
We strongly agree with giving our loyal testnet community first access to tokens, but we also want to make sure newer members aren’t unfairly penalized. We also need to be careful that we don’t create an unbalanced market where early buyers are strongly incentivized to dump their tokens. The HOPR Association does NOT benefit directly from this sale. The goal is that the HOPR Genesis DAO will create a stable environment in which HOPR Association can attract new larger investors by selling tokens from its treasury, in order to guarantee financial security until 2022 and the launch of the HOPR DAO itself. This won’t be possible if the token price immediately plummets.
There are also pressures at the opposite end of the scale. A raise of $500k is really the minimum amount that will make a Balancer decreasing price auction work smoothly. We’d like to strongly encourage that raise amount, without penalizing individual DAO participants.
Therefore, if the presale has not raised $500k after 24h, the individual purchase cap will be raised by 50% every 3h until $500k is collected. Everyone will have a chance to buy in a reasonable timeframe without being scooped by whales. But if we don’t reach our cap, people with a larger budget can come back and rebuy. This addition will apply to all three proposals.
Finally, there has been a lot of great discussion in the community since the first round of voting closed, particularly with regards to liquidity and locking tokens. We want to give people the option to express their preferences towards this, even though none of the original proposals explicitly mentioned this mechanism. We’ve therefore added a lock-up option to Proposal 2, which we think also addresses parts of that proposal which didn’t add up (literally).
So what remains is to determine the balance between the two phases of the launch, and here the proposals differ strongly.
PROPOSALS TO VOTE ON
Proposal 1 would place 20m HOPR tokens into the pre-sale at a price of $0.05. 59m HOPR tokens would go to the LBP, and 6m to Uniswap.
Proposal 2 was not entirely clear. It disagreed with Proposal 1, but the figures didn’t add up (the proposed split was 55m/25m/9m, which adds up to 89m). It also assumed a raise of only $1m from the pre-sale, the same as Proposal 1, which doesn’t make sense given the huge increase in available tokens.
Still, we want to try and operate according to the DAO’s wishes, so we’ve modified the figures as little as possible in the way we think best matches the intent of this proposal.
To reconcile this, we assume the intent was a 55m/25m/5m split, and the pre-sale price remains at $0.05. The individual cap is raised accordingly. We’re also going to use this proposal to introduce the idea of locking tokens which the community is keen on. Under this proposal, 50% of the tokens each person buys at presale would be available immediately after the LBP closes, the other 50% would be locked for 18 months.
Proposal 3 also changed the weightings, to 50m/30m/5m. It also understood that the amount raised for the LBP could vary. So we’re happy to implement this proposal as-is.
We think these modifications strike a good balance between implementing the proposals suggested by the DAO while safeguarding against possible short-term risks. I look forward to hearing any feedback.
Voting will begin on Friday at 3pm CET in the Core section of the HOPR Genesis DAO snapshot page and last for 24h.